"By law, charities must only conduct nonpartisan voter activities to keep their tax-exempt status. But the law also allows charities to register and mobilize likely Democratic or Republican voters." [3]

In exchange for being able to accept tax-deductible donations, the IRS demands that 501(c)(3)'s refrain from "activities which constitute participation or intervention in a political campaign on behalf of or in opposition to a candidate." This includes "the publication or distribution of written or printed statements or the making of oral statements on behalf of or in opposition to such a candidate." But 501(c)(3) groups like the Americans for Prosperity Foundation can share a portion of their resources with a 501(c)(4) affiliate, like Americans for Prosperity.[1] Unlike 501(c)(3) organizations, 501(c)(4) organizations may lobby for legislation; they may also participate in political campaigns and elections, as long as campaigning is not the organization's primary purpose.[2] There has long been a hanging question in campaign finance law, however, over just what constitutes a political communication or campaign.[3]

"There are, however, a few key differences that make 501(c)s a far more insidious vehicle for soft money. The law does not require that they disclose how much they spend until well after Election Day. Worse, they don't have to disclose who their donors are at all. Even foreign governments can in theory give money, with no questions asked. No one knows how much the Republican shadow party has raised or will spend this year. But the tens of millions they spent in 2002 were instrumental in putting the Senate back in GOP hands--and there's every possibility they could help push Bush and the Republicans over the line come November."